Consumer Insights Newsletter #003
Has Consumer Action on Energy Prices Lost its Heat?
Sarah Ball
Sarah's 19 years of experience in the media analysis industry hold her in good stead for her role leading on research methodology development. She was an early innovator in social media insights work and is responsible for data sourcing and tool selection.
CONTEXT
The UK’s new Prime Minister, Liz Truss, announced a package of support to tackle rising energy price on 8th September, just three days after taking the reins, including a 2 year cap on the average household annual energy bills at £2,500 from October 2022. Prior to this announcement, consumer concern over energy bills had been increasing after a large rise in the energy price cap from OFGEM since last year, and predictions of even larger rises in this autumn and into 2023. In this blog post, we analyse digital and social media data to understand the reaction to the energy support package promised by the new PM, including the impact on the consumer action campaign Don’t Pay UK.
INSIGHT:
Don’t Pay campaign sign-ups fell sharply after government support announced
The Don’t Pay UK campaign had the goal of getting 1 million UK residents to commit to withhold payment to their energy suppliers if demands for a reduction in energy bills to an ‘affordable level’ were not met. At the point of writing this blog (26th Sep 2022) the campaign had 191,308 people signed up to go on ‘bill strike’. The campaign launched in June 2022, and by 7th August had over 90,000 sign ups.
We used the Wayback Machine internet archive to piece together a timeline of daily sign-up volumes on the Don’t Pay UK site since 7th August, and researched key events that correlated with peaks in consumers committing to take action. Don’t Pay UK’s communications campaign, which generated high-profile coverage such as an interview on ITV’s Good Morning Britain (12th August) and enlisted the support of celebrity Russell Brand (2nd September), resulted in peaks in sign-ups. External drivers of attention for the campaign included forecasts for, and the announcement of, a steep rise in the October energy price cap by OFGEM.
The biggest peak in sign-ups came after the first details of the new PM’s energy support package were shared in the media on 6th September, continuing through the 7th and into the 8th September. After the Government officially announced the Energy Price Guarantee (EPG), sign-ups dropped sharply, falling to an average of 283 per day, compared to an average of 4,770 per day in the two weeks up to 9th September. We also analysed social media posts from Don’t Pay UK across Twitter, Facebook and Instagram, observing that engagements (likes, comments and shares) fell 56% since 9th September to an average of 775 per post, from an average of 1,766 per post between 1st August and 8th September.
So why did sign-ups to Don’t Pay peak around the time of the announcement, before drastically falling back? The data suggests that a some consumers had been waiting for the PM to signal her intentions on the energy bill crisis before making a decision to join the campaign and subsequently felt the package did not do enough to help those struggling with their bills. However, our analysis indicates that the majority were ‘relieved’ by the announcement, most likely resulting in a loss of impetus for the Don’t Pay campaign as consumers decided that they did not need to take radical action to force further reductions on bills. One person said: ““it's a huge help and now gives people clarity and certainty to plan around.”
INSIGHT:
Concerns that energy bills are ‘double’ what they were last winter
Relief over the support package for energy bills was not necessarily associated with wholly positive sentiment towards the Government’s response to the crisis. Some indicated that they felt the situation should have been dealt with more quickly: “I’m relieved but I feel like they have let it go on this long, letting us think it would be so much higher so we’re now almost grateful that our bills are ‘only’ double.” Similarly, another person said; “Threaten to quadruple energy bills. You are relieved they’ve doubled…you’ve been played people.”
Indeed, the main point of criticism from those responding to the announcement of the EPG was that the cost of energy for consumers would still be ‘double’ what it was last winter, accounting for 13% of posts that included personal reactions to the new policy.
Conversations online indicated that a considerable number would struggle to pay despite the ‘freeze’, even with an additional £400 of support for all households. One person said, “Just had an email from my energy company reminding me that the £2500 energy bill cap is for an “average household” and my bill may be more. It doesn’t matter, I can’t pay it either way.” A disabled person posted: “My electric bill is going up from a barely affordable £202 per month to £470. Hot water is now rationed to 1 hour a day, electric heaters will stay off. I have no clue how I am going to pay it.” Another said, “Who can pay DOUBLE? How is this fair. It will be impossible for millions to pay.”
INSIGHT:
Confusion over £2,500 cap
There may be a substantial number of individuals who experience bill shock during the winter, as there was evidence of confusion from some members of the public over the meaning of the ‘cap’ in prices. Some conversations indicated misunderstanding that the £2,500 cap would mean households could use unlimited energy for a fixed price. The communications about the EPG in the media and from the Government were blamed for the confusion: “the communications on this are awful. It's so unclear what it means in real terms. Our monthly energy bills are around £500 - does that mean once we've reached five months of bills we don't pay anymore?”
However, while there was relatively widespread evidence of confusion over the meaning of the cap, those expressing misunderstanding tended to be corrected by their peers: “Bills are not capped - if you use more, you pay more.” Discussions around misconceptions from the public about how energy bills are calculated prompted some to call for more teaching of everyday household financial skills in schools.
INSIGHT:
Consumers still aim to cut back their energy use
With energy bills still significantly above the level paid last winter, there were indications that many still intended to be more frugal with their use of gas and electricity. One consumer said: “These price rises have certainly made me think a bit and start turning off what I don't use.” Another commented that in the ‘real world’ people can’t afford £200+ a month on energy bills: “they will have to cut down.”
There was a significant increase in tactics aiming to ‘heat the human, not the home’ by investing in energy saving products to keep warm without turning the heating on. One person said: “At this point it’s cheaper to buy blankets, hot water bottles, slippers and fleecy pyjamas than it is to put the heating on.” Discussion about electric blankets and heated throws increased by 228% in July to September this year, compared to the same period in 2021. There was a 150% increase in discussion of wearing extra layers to keep warm and a 52% increase in discussion of hot water bottles and compared to 2021. Sales of such items are likely to increase despite the EPG policy, as consumers look to reduce their energy use to cope with what is still a substantial year-on-year rises in bills.
“I have no clue how I am going to pay it”
“Who can pay DOUBLE? How is this fair. It will be impossible for millions to pay.”
“Does this mean that for £208 pm we can have our heating on all day?”
“The communications on this are awful. It's so unclear what it means in real terms”
“These price rises have certainly made me think a bit and start turning off what I don't use”